British Pound Talking Points:
- The GBP[1] pulled back to begin the year, fresh on the heels of a profusely strong bullish breakout in the month of December. With an exit date from the EU now set, will GBP bulls continue to reclaim lost ground?
- Those recovery moves have shown in a varied manner, running aggressively against the Yen[2] and slightly less so against the US Dollar[3]. EUR/GBP[4] has been a bit quieter but, potential remains given the current technical backdrop.
GBP Claws Back Early-Year Losses
The New Year started off in a bearish manner for the British Pound, as GBP/USD[5] fell from a perch above 1.3250 all the way down for a test below the 1.3000 psychological level[6]. Support began to show in Cable on Monday, as taken from a bullish trendline projection connecting swing lows from November and December, and that support held through Tuesday trade until buyers were able to make a concerted push back above the big figure.
GBP/USD Daily – Threatening Topside Break of Bull Pennant
Chart prepared by James Stanley[7]; GBPUSD on Tradingview[8]
As looked at in the Tuesday webinar[9], at the time that support was setting-in there was a portion of unfilled gap remaining from this week’s open. That gap had projected around the 1.3050 level, and that gap has now been closed as buyers have continued to push as the week has progressed.
At this point, resistance potential shows around the resistance side of the recent wedge formation. Above that, a Fibonacci level[10] at 1.3117 lurks overhead, and above that is another potential resistance level at 1.3187. On the support side
